Flipkart fails to get GSP status

The second list of GSPs does not include Flipkart and several startups such as ClearTax, LegalRaasta and Moglix, which had applied to be GSPs.Mugdha Variyar | ET Bureau | August 05, 2017, 09:12 IST

The GST Network, the nodal agency in charge of the technological infrastructure for the new goods and services tax regime, has shortlisted 69 more companies to become GST Suvidha Providers to facilitate more channels to route invoices under the GST to the central database.

These include HDFC Bank, Zoho Corporation and two of the remaining Big Four consulting companies – PwC and KPMG. The agency had earlier shortlisted 34 GSPs. The second list does not include Flipkart and several startups such as ClearTax, LegalRaasta and Moglix, which had applied to be GSPs.

Infosys Limited withdrew its application to be a GSP after applying in the second batch in May. The company probably withdrew due to concerns raised over conflict of interest, since it is also building the GSTN platform, according to a few GSPs.

Infosys had bagged the Rs 1,380-crore contract to build the portal in 2015. The company said in a statement that “it was essential to focus our efforts on the ongoing GST project that we are working on and hence decided to withdraw the application".

The 69 shortlisted companies will now make presentations of their solutions to the GSTN, which will then make a final list. In the first batch as well, the GSTN had announced a shortlist of 48 companies before finalising 34 GSPs.

In the first phase, it shortlisted 34 companies including EY, Deloitte, Tata Consultancy and Reliance Corporate IT Park to become GSPs. A GSP has to develop technology solution for taxpayers and other stakeholders to help connect to the GST systems for compliance, starting from registration of the entity to uploading of invoice details and filing returns.

Flipkart had applied to be a GSP to keep more control over filings to get more sellers on board by offering tax solutions, ET had reported in May. However, it was found ineligible due to financials, as per the GSTN website.

The GSTN had relaxed eligibility criteria the second time around and lowered paid-up capital and turnover requirements to encourage startups to apply.

Some of the startups that did make the cut include Paynear and Eko India Financial Services. As many as 160 companies applied to be GSPs in the second phase.

HDFC Bank, which owns a stake in GSTN, will be the first bank to become a GSP if it successfully completes the final demo. While the Union and state governments together own 49% equity in the GSTN, which is listed as a not-for-profit, private company, the rest is held by private financial institutions.